Lululemon (LULU) Stock Slides After 2Q Earnings Release
Shares of Lululemon Athletica Inc. (LULU) were trading down -6.42 or -8.37 percent to $70.24 per share in Friday’s premarket trading. The company released slightly lower than expected revenue for its second quarter earnings yesterday after the market close. Lululemon Athletica closed at $76.66 per share, up +0.15 or +0.20 percent in Thursday’s regular trading session.
Vancouver, British Colombia based Lululemon Athletica Inc. was founded in 1998 by Chip Wilson.
For Lululemon’s fiscal second quarter ended on July 31st, the company reported diluted earnings per share of $0.39 versus $0.34 in the same quarter one year ago.
Lululemon reported comparable store sales in the quarter had increased +3 percent, or +4 percent on a constant currency basis, while direct to consumer net revenue increased +6 percent to $874 million or +7 percent on a constant currency basis. With the exclusion of an online warehouse sale, direct to consumer revenue would have increased by +16 percent.
Gross profit came to +$254.2 million, an increase of +20 percent from last year with 49.4 percent as a percentage of net revenue, which compares to 46.8 percent in 2015’s second quarter. Income from operations came to $74.0 million, up from $66.6 million last year, an increase of +11 percent.
In the company’s press release, Lululemon Chief Executive Officer Laurent Potdevin stated that, “The second quarter demonstrated strong results as we delivered sales and EPS at the high-end of our guidance and saw an important inflection in our gross margin and earnings performance. Our progress in the second quarter, especially in gross margin and inventory, marks the beginning of our recovery in profitability and sustainable long term growth.”
For the third quarter, Lululemon expects net revenue to be in the range of $535 million to $545 million. The estimate is based on total comparable store sales in the mid single digits on a constant currency basis. Diluted earnings per share are forecast to be $0.42 to $0.44 in the third quarter.
For the full 2016 year, Lululemon now expects revenue to be in the range of $2.325 billion to $2.350 billion based on comparable store sales in the mid single digits on a constant currency basis. Diluted earnings per share are expected to be between $2.11 and $2.19 for the full year or $2.07 to $2.15 adjusted for tax and related interest items incurred in the first two quarters.
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Lululemon CEO: Q2 progress marks recovery, growth
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